Jan 19, 2021

Emergency Message On Seila Law

This emergency message provides guidance to administrative law judges (ALJs) and Appeals Council (AC) members regarding objections and arguments based on a recent Supreme Court decision, Seila Law LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020). This message also provides instructions in the Case Processing and Management System (CPMS) and the Appeals Review Processing System (ARPS) for flagging cases in which claimants or representatives raise such objections or arguments.

On June 29, 2020, the Supreme Court of the United States ruled on the constitutionality of the structure of the Consumer Financial Protection Bureau (CFPB). The Supreme Court held, based on circumstances regarding the CFPB, that the CFPB’s leadership by a single director, removable by the President only for inefficiency, neglect of duty, or malfeasance, violated constitutional separation of powers principles. The Supreme Court further held that the for-cause removal provision was severable from the remainder of the CFPB statute.

At our ALJ hearings and AC levels, although the Supreme Court’s decision did not directly address the Social Security Administration (SSA), some claimants and representatives have raised arguments citing
Seila Law to challenge the constitutionality of SSA’s structure or the authority of the agency or adjudicator to act on their claim. Such constitutional contentions, when properly presented in agency proceedings, may be preserved for judicial review. Agency adjudicators facing objections that invoke Seila Law should consider and address whether the claimant wishes to withdraw his or her hearing request and whether the ALJ should disqualify himself or herself. We provide guidance on such issues in this EM. ...

 C. What should an adjudicator do if a claimant or representative raises an objection under Seila Law?

    1. Challenge Made at the Hearing Level
      If a claimant or representative presents an objection invoking Seila Law at the hearing level (whether orally at the hearing, in writing before or after the hearing, or both), the ALJ should consider several questions, set forth below, and document the ALJ’s consideration of these questions in the hearing decision as appropriate.
      (1) Is the claimant seeking to withdraw his or her request for a hearing?
          a. Under 20 C.F.R. §§ 404.957(a) and 416.1457(a), an ALJ may dismiss a request for a hearing at any time before the notice of the hearing decision is mailed, when the claimant withdraws the request orally on the record at the hearing or in writing.
          b. The ALJ should consider whether the claimant’s objection seeks to withdraw his or her request for a hearing.
              i. If the claimant’s objection expresses an intention to withdraw the request for a hearing, the ALJ should properly develop the request by following the guidance in HALLEX I-2-4-20.
              ii. If the claimant’s objection does not express the intention to withdraw the request for a hearing, it would be appropriate to indicate in the hearing decision that, while the claimant objected to the proceeding based on separation of powers principles, the claimant did not ask to withdraw his or her request for a hearing as permitted under 20 C.F.R. § 404.957(a) or §416.1457(a) (or both); that the claimant appeared at the hearing; and that the ALJ accordingly issues a decision on the claim.
      (2) Is the claimant asking the presiding ALJ to withdraw from the case in favor of another agency adjudicator?
          a. ALJs have a duty to consider objections to the ALJ presiding in the case. See 20 C.F.R. §§ 404.940, 416.1440. Under the regulations, an ALJ shall not conduct a hearing if he or she is prejudiced or partial with respect to any party or has any interest in the matter pending for decision. See SSR 13-1p. If the ALJ finds withdrawal appropriate, another ALJ will be appointed to conduct the hearing.
          b. The ALJ should consider whether the claimant’s objection seeks the ALJ’s disqualification and withdrawal in favor of another agency adjudicator.
              i. If a claimant’s objection seeks the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ shall either address the objection in the decision or withdraw, as appropriate under regulatory guidance. See HALLEX I-2-1-60.
              ii. If a claimant’s objection does not seek the presiding ALJ’s disqualification and withdrawal on grounds specific to the presiding ALJ (such as prejudice or partiality), the ALJ should indicate in the hearing decision that the claimant has not challenged the presiding ALJ’s qualifications in a manner that is specific to the presiding ALJ (such as prejudice or partiality), and that the ALJ accordingly conducted the hearing and hereby issues a decision on the claim.
      (3) Is the claimant objecting to the ALJ’s authority to render an unfavorable decision on the claim (but not to render a favorable decision on the claim)?
          a. Governing regulations provide that the ALJ shall look fully into the issues at a hearing, and, based on a preponderance of the evidence offered at the hearing or otherwise included in the record, issue a written decision giving the findings of fact and the reasons for the decision. 20 C.F.R. §§ 404.944, 404.953(a), 416.1444, 416.1453(a).
          b. If a claimant’s objection expresses a view that, because of separation of powers principles, the ALJ lacks authority to deny the claim, it would be appropriate for the ALJ to indicate in the hearing decision that regulations governing the ALJ’s duties and responsibilities require the ALJ to decide a claim, whether favorably or unfavorably, based on the evidence of record. ...

     This is an obvious attempt to intimidate claimants and their attorneys to prevent Seila Law objections. It implies, but doesn't state, that favorable decisions might be overturned if the Supreme Court holds that the position of Commissioner of Social Security is unconstitutional. It doesn't allow ALJs or the Appeals Council to actually consider Seila Law objections on the merits but if they don't raise such objections, the agency will argue in court that they waived them. This puts ALJs in the position of playing litigation games with claimants. This is unworthy of the Social Security Administration. 

     By the way, there was no need for this Emergency Message if Andrew Saul was about to resign as Commissioner.

7 comments:

Anonymous said...

I can understand that there is an argument that if a claimant is challenging the ALJ's authority to hold the hearing and decide the claim, why should the ALJ still hold the hearing and make a decision.

Barnabas de Kansas said...

Quite honestly, I'm not planning to object to the ALJ's authority to hold the hearing. Our position, at my firm, is more that the rules put together by a Commissioner under the current structure are unconstitutional because the Commissioner never had authority to put them in place.

Anonymous said...

Nothing in the EM addresses objections raised at the AC. Is that on the horizon?

Anonymous said...

Not sure what this has to do with Saul, but...

There is really a simple matter here that most lawyers seem to not get.
Yes, the ALJ can issue a favorable decision because then there is no adverse action and no need to appeal. If the claimant is getting what they asked for, there is no denial of due process. An ALJ who may not be correctly appointed issuing a favorable decision would be the same as DDS making a favorable decision. There is no adverse action so there are no other issues to raise. These ALJs are supposed to be smart lawyers, aren't they? So, why does this simple concept elude them.

Anonymous said...

"This puts ALJs in the position of playing litigation games with claimants. This is unworthy of the Social Security Administration."

I understand the point that SSA should be above playing games. On the other side of the coin, do you consider it bad faith for an attorney to argue that an ALJ has constitutional authority to issue favorable decisions, but not unfavorable ones?

Anonymous said...

6:43 YOU SHOULD READ 3:28 LOL

Anonymous said...

I'm having difficulty understanding how the Seila law case could be used to help a denied claimant. First, in the Seila law case the unconstitutional provision was found to be severable so Seila law case really doesn't say what would happen if the potentially unconstitutional part of SSA is not severable. The Seila plaintiff's argued that if the unconstitutional part was not severable that would make the whole agency unable to act.

I don't see how this remedy, if it is available for SSA cases, would help. Firstly, in Seila law the plaintiff was trying to enjoin the agency from acting. Here in SSA we want to make the agency act so as to approve benefits. Thus, enjoining SSA from acting would serve no purpose for us, except if you are enjoining the agency from terminating benefits in a cessation case.

In Lucia, there was a clear remedy that was beneficial to us spelled out by the court; namely that if there is an objection you get a new hearing with a new ALJ. In seila no one argued that as a potential remedy, and more problematic is that in Lucia the issue related just to the authority of the ALJ's whereas in Seila it relates to the authority of the whole administration to act.

Perhaps I'm missing something, and if I am I would like someone to guide me. However, I don't see what remedy I would be requesting, that could help a claimant if granted, if I raise the Seila law case as a precedent.